XRP’s story centers on speed, efficiency, and global liquidity. It was engineered to solve slow settlement and costly transfers. That core design makes XRP valuable when it moves freely across networks. The current debate challenges whether today’s market structure supports that vision or restricts it.
XRP was created for real-time value movement across different ledgers. Its architecture delivers fast settlement and low transaction costs. These features support its role as a neutral bridge asset in global payments. XRP works best when it flows through corridors without friction. Versan Aljarrah, founder of Black Swan Capitalist, highlighted this point in his recent analysis.
XRP was designed to be a free-floating bridge currency for real-time settlement.
An ETF traps it in custody, turning liquid utility into a static financial product. It can’t fulfill its purpose sitting on a warehouse shelf.
The facts are always ignored until it's convenient. https://t.co/9nAQOaWnhu
— Black Swan Capitalist (@VersanAljarrah) November 24, 2025
How ETFs Change XRP’s Function
Spot ETFs hold assets in custodial storage for investors. This model removes tokens from open circulation on exchanges. When XRP enters an ETF, it becomes a stored financial product. It is no longer used within payment channels or liquidity paths. This shift limits the token’s availability for settlement operations across networks.
ETF demand brings large inflows that move XRP into custodial vaults. These inflows show rising institutional interest in regulated XRP exposure. However, this process reduces the available circulating supply for settlement use. Price discovery benefits from institutional participation, but liquidity for utility can tighten.
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Adoption Without Mandatory Token Use
Many institutions use RippleNet for messaging and settlement rails. They do not always use XRP as the bridge asset. This trend existed long before ETFs entered the market. It shows a gap between enterprise adoption and token utility. The new ETF landscape adds more weight to this long-standing issue.
The Balance Between Utility and Financialization
XRP needs active circulation to maintain its role in settlement flows. Long-term storage reduces operational flexibility and affects liquidity depth. ETFs increase regulated access but also immobilize part of the supply. Aljarrah urges the market to recognize this trade-off. His warning stresses the need to protect XRP’s real utility as financialization grows.
The future depends on how institutions manage ETF inventories and liquidity channels. XRP can support both investment and settlement only if enough supply remains active. Without that balance, its original purpose as a free-floating bridge currency may weaken in practice.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are advised to conduct thorough research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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